SOURCE / ECONOMY
Gallagher’s ‘decoupling’ push to backfire on US companies
Published: Dec 20, 2022 10:14 PM Updated: Dec 21, 2022 12:00 AM
Illustration: Tang Tengfei/Global Times

Illustration: Tang Tengfei/Global Times

The US and some Western countries have spent years trying to "decouple" themselves from China economically. However, this is self-inflicted harm to their own economies. The latest example is Gallagher's remarks saying he plans to focus scrutiny on US investments in China.

US Republican Representative Mike Gallagher has received special attention recently because he was named earlier this month to lead a select committee being created in the US House of Representatives to focus on economic and security competition with China.

"If the story of the last five-ish years was enhanced scrutiny of Chinese investment in the US, the next phase of this is going to be enhanced scrutiny of outbound US investment into Communist China," Gallagher was quoted by Bloomberg as saying on Tuesday.

Bloomberg reported that US President Joe Biden and Congress are both considering proposals that would create a regime for monitoring and potentially blocking US investments in China, and Gallagher predicted that "some version" of such a plan is "inevitable."

It is wrong and dangerous for the US to continue indulging in its "decoupling" policy. US enterprises and their investment can one day become a direct target and victim of Washington's security review. This was hard to imagine in the past, but now it is an emerging and growing reality.

Some US politicians may want to show off their hawkish attitude toward China to pander to a populist base, but their China policy has ended up being a distorted mix of extremes and isolation. They will cause a lot of self-inflicted harm and are hard to sustain in the long term.

China remains a priority market for a large section of the US business community, with many US firms believing it is vital to stay competitive in this market in order to win globally, according to the 2022 American Business in China White Paper published by the American Chamber of Commerce in China in May. With China being a top market priority for nearly two-thirds of the chamber's member companies, Colm Rafferty, the chamber's chairman, said its members believe that a "decoupling" of the US and China economies is in neither country's economic interest.

If some politicians in Washington tries to artificially push "decoupling" of US and Chinese economic ecosystems by directly targeting US enterprises, relevant measures will continue to damage the US economy and will definitely result in strong opposition from US companies.

The intention behind Washington's "decoupling" push is to exclude China from the global industrial chain and strengthen US supply chains. Gallagher's efforts to hinder US companies' presence in the Chinese market comes at a time when the Biden administration tries to revitalize US manufacturing and bring manufacturing jobs back to US shores.

In recent years, some US politicians with ulterior motives have been inciting companies to transfer production from China back to the US or to Southeast Asia and South Asia, but such attempts are doomed to fail. Only 53 companies - 17 percent - indicated that they are considering moving operations or footprint out of China in the next one to three years, with just 19 percent of those planning to re-shore to US locations, according to the 2022 China Business Report released by AmCham Shanghai in October. The majority of US companies are keeping their footprint and operations in China and focusing on localization strategies, the survey revealed.

Some US politicians want to exclude China from the global industrial chain, a move that will be futile in the end. China has been unswervingly promoting high-level opening-up, and steadily increasing the utilization of foreign investments. Foreign direct investment in the Chinese mainland, in actual use, expanded 14.4 percent year-on-year to nearly 1.09 trillion yuan ($156.44 billion) in the first 10 months of 2022, according to data from China's Ministry of Commerce. Despite the "decoupling" push of the US, China, the world's second largest economy, has still great potential in terms of its investment attraction.

Although some US politicians are attempting to hinder US companies' presence in the Chinese market, China welcomes US enterprises to increase their investments in the country.

If US politicians overstretch the concept of "national security" and target specific US companies with unfair measures, then let China protect those US firms. Those US politicians should be ashamed of their behaviors.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn